Fevertree trading so far in 2025 has been in line with group expectations. Momentum in the US has been strong, with underlying brand growth remaining ahead of the competition.
Europe continues to deliver good momentum across multiple markets, however, sales in Germany remain muted.
As part of the partnership agreement, Fevertree and Molson Coors will equally share the 10% US tariff on UK imports and are actively working together to mitigate the short-term tariff impact.
The group said it remains "comfortable’’ with its full-year expectations of low single-digit revenue growth and underlying cash profit (EBITDA) margins of around 12%.
Around £42.5mn of the ongoing £100mn share buyback programme has been completed.
The shares remained flat in early trading.
Our view
Fevertree’s trading so far this year has been in line with group expectations, helped by good progress in the US and most of Europe. That’s given the group confidence to reiterate its full-year guidance, although the target of low single-digit revenue growth was hardly stretching to begin with.
Fevertree’s progress in the US to date has been impressive, becoming the number one brand in both the tonic and ginger beer categories. This market has already grown to become the group’s largest region by sales. But given the vast size of the US, there’s still a lot of room for growth.
Momentum in the US continues to build following the strategic partnership with Molson Coors. Fevertree handed over equity in the business, and in return, it’s getting access to Coors’ broad US production, distribution and customer network. Having the second-largest US brewer on your side is no bad thing.
While the 10% US tariff on UK imports will be a headwind in the short term, the cost is set to be shared equally between Fevertree and Molson Coors. The impact is expected to ease over the medium term, as local US production ramps up.
Fevertree continues to expand its drinks portfolio with new products, and non-tonic mixers had grown to around 45% of total sales at the last count. These new offerings open the door to different types of drinkers, drastically increasing the number of customers it has to go after.
But there are some challenges to be wary of.
UK sales continued to trend in the wrong direction last year. It turns out there is a cap on how much premium tonic you can sell, and it looks like Fevertree has reached it in its home market. Successful international expansion will be critical to continued growth.
While we’re positive on the long-term outlook for the Coors partnership, there’s a lot of work to be done to get it up and running. Operational creases will likely need to be ironed out as Coors takes over US production, so we wouldn't rule out disappointment on the profit front as the year progresses.
Last we heard, the balance sheet was in good shape with the group sitting on net cash of £96mn and there’s currently a prospective 1.9% dividend yield on offer. The partnership may reduce demands on Fevertree’s cash over time, potentially clearing room for further shareholder returns. But as always, no shareholder returns are guaranteed.
The long-term outlook is better than it has been for some time. But even with the recently announced partnership, we see plenty of trip hazards in the near term. Potential investors should expect a bumpy ride.
Environmental, social and governance (ESG) risk
The food and beverage industry tends to be medium-risk in terms of ESG though some segments like agriculture, tobacco and spirits fall into the high-risk category. Product governance is a key risk industry-wide, especially in areas with strict quality and safety requirements. Labour relations and supply chain management are also industry-wide risks, with other issues varying by sub-sector.
According to Sustainalytics, Fevertree’s management of ESG risk is average.
The group doesn’t use plastic bottles but instead uses glass or cans from a portion of recycled materials. As such, the group’s products are completely recyclable, however, they are energy-intensive to mould and make. Fevertree also claims its range of mixers sold in the UK are carbon neutral. However, no concrete scope emission reduction targets appear to be in place.
Fevertree key facts
All ratios are sourced from LSEG Datastream, based on previous day’s closing values. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn’t be looked at on their own – it’s important to understand the big picture.
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